2018 (8) TMI 689

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....g the proportionate CENVAT Credit availed on such inputs; that whereas the appellant availed CENVAT Credit of CVD (Countervailing Duty) and SAD (Special Additional Duty) on such inputs, they had however reversed credit amount equivalent to CVD only; that as a result, credit reversed on the input removed as such, is lesser than the CENVAT Credit taken on such inputs. Accordingly, proceedings were initiated against the appellant by issue of a Show Cause Notice dt. 02.12.2011, inter alia proposing demand of an amount of Rs. 2,85,27,230/- with interest thereon and imposition of penalties under Rule 15(1) of the CENVAT Credit Rules (C.C.R.), 2004 read with Section 11AC of the Central Excise Act, 1944 (hereinafter called the 'Act'). Appellant pai....

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....VD had already been reversed and only a smaller portion of SAD (4%) remained to be reversed. In any case, immediately on being pointed out, they had reversed Rs. 2,56,89,772/- towards wrongly availed credit and Rs. 89,88,471/- towards interest liability even before issue of Show Cause Notice. (iv) Remaining liability demanded in the impugned Order was paid up immediately after issue of the order dt. 30.11.2011. (v) That the goods have only been cleared to their own sister unit and hence, there is revenue neutrality. (vi) He relies on the following case laws : L.G. Electronics Pvt. Ltd. Vs. C.C.E. [2010 (255) E.L.T. 135 (T)] C.C.E. Vs. Indeo ABS Ltd. [2010(254) E.L.T. 628 (Guj. HC) C.C.E. Vs. Coca Cola India P. Ltd. [2007 (213) E....

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....ion. It cannot be disputed that the goods were removed only to the sister unit of the appellant. In a plethora of decisions, higher appellate forums have consistently held that in such situations there would be revenue neutrality, since even if the credit had been reversed or the duty paid, the sister unit would well have been able to take the same amount as input credit. 5.3 CESTAT Chennai in Deepak Cables (India) Ltd. Vs. Commissioner of Central Excise Pondicherry [2018-TIOL-17-CESTAT-MAD], relying on the Supreme Court decisions in Commissioner Vs. Special Steel Ltd. 2016 (334) E.L.T. A123 (S.C.) and Precot Mills Ltd. Vs. C.C.E. Calicut [2011-TIOL-58-CESTAT-BANG] has taken the same view. The relevant portion of the order is reproduced as....

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....d upon CAS-4 certificate of the Cost Accountant is correct and the impugned orders holding otherwise are unsustainable. 7. Before we part with the cases, we note that the duty paid on such processed yarn cleared by appellant is being taken as Cenvat credit, by their own sister concern. This fact is not disputed by the revenue. If that be so, then the question of revenue neutrality arises, as it is an admitted fact that the transaction is mostly between the sister units. If that be so, the demand of duty on the appellant would be of no consequence as it would be revenue neutral. We find that all the case laws cited by the learned counsel support this proposition." 5.4 It is also not the case that appellant had not filed ER-1 returns, or t....